Affordability when repaying student loan debt can often be problematic, especially for recent graduates who enter into the job market during a time when many employers were not hiring or cutting back on the workforce. Graduates who have student loan debt obviously have had difficulties making repayments on these forms of debt, but there are options which have made meeting multiple student loan debt repayment obligations more affordable through college loan debt consolidation.
Student loan debt consolidation plans are available on most types of student loans, be they federal student loans or private loans, and are typically used by students who have multiple student loans which require repayment. Some students have a grace period after graduation and are not required to make repayments on their student loans for a set period of time, but for those who have had trouble finding employment which has allowed them to meet multiple debts, consolidation is usually seen as one of the best options.
However, there are mixed feelings by some financial advisers when it concerns debt consolidation in general, particularly for student loans. It can seem beneficial for a student to consolidate debt as it will only require one monthly payment and a student will only be combating one interest rate. Also, low consolidation rates on federal student loans, for example, often draw students to use consolidation as a way to find the affordability they need end their monthly payment obligations.
Yet, advisors often suggest that students sit down and take stock of their debt situation before turning to consolidation. There are many benefits which students have received from student loan debt consolidation plans, but overall costs could increase thanks to consolidation and it may be quite expensive for some. Obviously, someone who has a large amount of student loan debt from various sources will have a longer timeframe when it comes to repaying these loans when they are consolidated.
In cases such as this, advisers often feel that students may want to explore repayment options which will allow them to combat student loan debts separately, as smaller principle amounts may be easier to combat and, for some, erasing their debt could be less costly when loans are kept separate rather than consolidated. It goes without saying, each student loan situation a graduate faces is different, and this is why advisers have suggested that students run the numbers to see if consolidation will be in their best interest.
Some students have consolidated various student loan debts into one consolidation loan and have made more than their minimum monthly payment requirement on this debt, which has allowed them to erase their debt faster and at a lower overall cost. Yet, there have been students who have concentrated as much money as they can towards one debt, while meeting minimum requirements on other student loan debt obligations, and have begun the process of erasing their student loans by paying them separately.
However, students who feel they may have trouble making their student loan debt repayments shouldn’t drag their feet because this could lead to more difficulties down the road, especially if a student is in a situation where they miss payments on their various student loan debts. Obviously, no matter what route a student chooses when it comes to debt repayment, it needs to be one which can be met within their personal financial situation at the present time and will allow them to erase their debt as quickly and inexpensively as possible.